In their search for affordability, home buyers are taking their house hunts further out from the city limits. Exurbs are the outskirts of major metro areas that lie beyond the suburbs. Many offer more land and greater affordability in new-home construction.
Single- and multifamily activity in the exurbs makes up only a small share of permit activity across the country, but their quarterly growth rates reached a new high in the first quarter of 2019, according to the National Association of Home Builders’ new Home Building Geography Index. Single-family permit activity has posted a 5.6% year-over-year growth rate, which is higher than that for large metro areas and suburbs, the index reveals.
“Being lower priced, housing in areas such as exurbs tend to be less sensitive to price changes and therefore were not as affected as suburbs of large metro areas by higher [mortgage] rates” last year, the researchers note. “As land is more freely available and cheaper in the exurbs than suburbs, building permit activity in this regional geography increased in an otherwise challenging quarter.”
Source: “Exurbs Grow During a Weak First Quarter per NAHB HBGI,” National Association of Home Builders’ Eye on Housing blog (May 28, 2019)